Kenya Economic Growth Drops to 2-Year Low as Drought Hits Crops


(Bloomberg) --

Kenya’s economic growth unexpectedly slowed in the third quarter as a drought weighed on farming output.

Gross domestic product increased by 5.1% in the three months through September from a year earlier, compared with 5.6% in the previous quarter, the Kenya National Bureau of Statistics said Tuesday in an emailed statement. The median of three economists’ estimates in a Bloomberg survey was 5.8%. The quarterly growth rate was the lowest in two years.

Key Insights:

  • Expansion in most sectors of the economy slowed. Growth in agriculture, forestry and fisheries, which makes up about a third of GDP, dropped to 3.2% compared with 4.2% in the previous quarter and down from 6.9% in the same period of 2018.
  • Growth in agriculture was hampered by a drop in production of key crops including tea and sugar cane, the statistics office said. The volume of vegetable exports declined by 28% and fruit shipments were down 11.3%.
  • The drop in farming output in East Africa’s biggest economy due to a drought has pushed up food inflation to 10%, the highest in more than two years, according to a separate release from the statistics office on Tuesday.

©2020 Bloomberg L.P.

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